A modest tax on the ultra‑wealthy could raise billions for Canada, book argues
An excerpt from Cancelling Billionaires Before They Cancel Us outlines a national annual wealth tax on fortunes over $25 million, estimated to raise $40 billion a year.
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By Torontoer Staff
A new book argues Canada should impose an annual national wealth tax on the ultra‑rich to fund public programs and reduce extreme inequality. The proposal targets fortunes above $25 million, starting at a one per cent annual levy, and could raise roughly $40 billion a year.
The argument arrives as similar debates play out elsewhere, notably in California where voters may consider a one‑time billionaire tax. The authors, Linda McQuaig and Neil Brooks, say a recurring Canadian tax would be harder to evade and would address the growing concentration of global and domestic wealth.
Why now: fortunes have soared
Wealth at the very top has expanded dramatically in recent decades. When Forbes first published a list in 1987 there were 140 billionaires worldwide, holding about 1.7 per cent of global GDP. The most recent list counted more than 3,000 billionaires, whose combined wealth equates to around 14 per cent of world GDP. The result is political and economic power concentrated in a tiny slice of the population.
That concentration is evident in Canada too. Credit Suisse data show the richest one per cent of Canadians increased their share of national wealth from 18 per cent to 26 per cent between 2010 and 2019, while other groups lost ground. The federal government does not publish comprehensive statistics on wealth at the very top, which helps obscure the scale of the gap.
How the proposed tax would work
McQuaig and Brooks propose an annual national wealth tax that applies only to very large fortunes, defined as net wealth above $25 million. The tax would start at one per cent and scale upward for larger holdings. Unlike income tax, which wealthy individuals often avoid by borrowing against assets rather than realising capital gains, a wealth tax directly targets net worth.
The authors contrast this annual approach with California’s proposed one‑time five per cent levy on billionaires, arguing a national, recurring tax is more predictable and more difficult to escape. Their estimate is that, applied in Canada at current wealth levels, the tax could produce about $40 billion annually for public services.
Enforcement and exit taxes
A common political objection is that wealthy people would simply leave. Broadly designed wealth taxes include strong exit provisions to discourage flight and to capture unrealized gains when residence changes. Canada already taxes unrealized capital gains for departing residents in many cases, which has been used in high‑profile situations in the past.
Rich people aren't going to let you come for their money. They're going to move.
Rosie Barton, CBC
The book notes that well designed exit taxes and enforcement measures would blunt that argument. It cites historical examples where wealthy Canadians faced substantial tax bills when attempting to move assets offshore, and it calls for closing loopholes that allow avoidance.
Philanthropy, foundations and public subsidy
The authors also examine the tax treatment of charitable giving. Large donations often come with generous tax benefits. In some cases the effective public subsidy for a donation can be very large, meaning taxpayers fund a big share of a wealthy donor’s gift.
Private foundations hold more than $100 billion in Canada, but they distribute only about five per cent of assets annually. Between 2018 and 2022 the 50 largest private foundations they studied disbursed just over $2 billion, with only 5.8 per cent going to poverty relief and 1.4 per cent to Indigenous causes. Much of the rest goes to universities and hospitals, often accompanied by naming rights for donors.
The book argues those tax incentives and the prevalence of foundations concentrate influence and prestige in a small number of families. The authors recommend reducing tax advantages for philanthropy and winding down foundations that hoard publically subsidized funds.
What the money could fund
- Universal pharmacare and mental health services
- Affordable housing and targeted homelessness programs
- Childcare expansion and early learning
- Indigenous services and reconciliation initiatives
- Public education and post‑secondary supports
The authors say that a relatively modest tax on an exclusive group, which they place in the top 0.1 per cent of wealth holders, would not materially reduce the lifestyle of those individuals. Claire Trottier, who serves on her family’s foundation board and supports a wealth tax through the Patriotic Millionaires, says wealthy people she knows would still have more than enough to spend.
Even with the tax, she and the wealthy people she knows would continue to have as much money at their disposal as they could possibly spend.
Claire Trottier
The book frames the wealth tax as a practical tool to free up billions for public priorities while addressing extreme inequality and the political distortions that flow from concentrated wealth.
Excerpted from Cancelling Billionaires Before They Cancel Us: The Urgent Case for a Wealth Tax, by Linda McQuaig and Neil Brooks. Published by Dundurn Press.
wealth taxbillionairespublic policyphilanthropyCanada
